PRECIOUS-Gold up on U.S.-North Korea tensions

(Updates prices) LONDON, Sept 22 (Reuters) - Gold recovered from a four-week low on Friday as investors sought a safe haven from geopolitical uncertainty caused by rising tensions between North Korea and the United States. Bullion is often used as a refuge in times of political or economic turbulence while assets considered risky such as stocks are dumped. North Korea said on Friday it might test a hydrogen bomb in the Pacific Ocean after Trump vowed to destroy the country, with leader Kim Jong Un promising to make a "mentally deranged" Trump pay dearly for his threats. "Gold took quite a beating after the U.S. Federal Reserve meeting but now the market got the news about North Korea and now investors are moving back in gold," Danske Bank analyst Jens Pedersen said. Earlier this week the U.S. Fed signaled that it was still on track to raise interest rates by the end of the year. This weighed on gold as tighter monetary policy raises the opportunity cost of holding non-yielding bullion.

Spot gold was up 0.4 percent at $1,296.02 an ounce,

as of 1157 GMT, having hit a four-week low of $1,287.61 in the previous session. Bullion was down 1.7 percent for the week and was headed for a second weekly decline.

U.S. gold futures climbed 0.3 percent to $1,298.60

an ounce. The dollar and stocks fell on Friday against the backdrop of these tensions while the Japanese yen and Swiss franc gained on the possibility of North Korea conducting another nuclear test.

However, the U.S. Federal Reserve's indication on Wednesday of one more rate increase by the end of the year could continue to restrain gold, a trader said. The dollar had risen to a two-month peak following the Fed comments. Spot gold may end its current weak bounce around a resistance at $1,299 per ounce and then fall towards a support at $1,281, said Reuters technicals analyst Wang Tao.

"For gold it will continue to be back and forth, one day its about Fed tightening and balance sheet reduction and the next it's about the geopolitical uncertainty that creates this tug of war," Danske Bank's Pedersen said.

Silver climbed 0.2 percent to $16.98 an ounce, while platinum was up 0.4 percent to $939.35.